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Brampton Brick Limited recently reported a loss of $77, or $0.01 per class A subordinate voting share and class B multiple voting share, for the third quarter ended September 30, 2009, on a weighted average 10,937,000 class A shares and class B shares outstanding. (All amounts are stated in thousands of Canadian dollars, except per share amounts, unless otherwise indicated.) For the third quarter of 2008, net income was $2,499, or $0.23 per share, on a weighted average 10,952,000 class A shares and class B shares outstanding.
For the nine months ended September 30, 2009, the company reported a loss of $9,578, or $0.88 per share, on a weighted average 10,937,000 class A shares and class B shares outstanding, compared to net income of $1,433, or $0.13 per share, on a weighted average 10,925,000 class A shares and class B shares outstanding, for the corresponding period in 2008.
For the third quarter ended September 30, 2009, the company incurred a loss of $77, or $0.01 per share, compared to net income of $2,499, or $0.23 per share, for the corresponding period in 2008. Net sales from continuing operations for the quarter were $19,234, compared to $27,427 in 2008. The net decrease of $8,193 was primarily due to lower clay brick shipments, which resulted in a decrease of $8,396 in net sales attributable to the Masonry Products business segment. Net sales of the Landscape Products business segment increased marginally from $8,019 in the third quarter of 2008 to $8,042 in the third quarter this year.
Net sales of the Masonry Products business segment were $10,855 for the three months ended September 30, 2009, compared to $19,251 for the same period in 2008. Operating income was $535, compared to $4,340 last year. For the nine-month period to September 30, 2009, this business segment incurred an operating loss of $4,198 on net sales of $26,396, compared to operating income of $9,701 on net sales of $50,198 in 2008.
The decrease in net sales was due to lower clay brick shipments, which, in turn, was attributable to a substantial decline in residential construction activity in both the Canadian and U.S. markets. In addition to the impact of significantly lower net sales, lower absorption of fixed manufacturing costs due to much lower production volumes in the Canadian operations and a higher loss incurred in the U.S. operations also contributed to the decrease in the operating income.
Selling, general and administrative expenses applicable to this business segment were lower in both the three- and nine-month periods of 2009 than in 2008, primarily due to lower sales commissions and lower personnel costs.
The Landscape Products business segment reported operating income of $1,039 on net sales of $8,042 for the three-month period ended September 30, 2009, compared to operating income of $118 on net sales of $8,019 in 2008. The improvement in operating results was primarily due to lower cost of goods sold, which, in turn, was due to improved manufacturing efficiencies and other cost-reduction initiatives. Net sales increased in the Canadian market as a result of higher sales volumes. Net sales in the U.S. market were lower due to the economic factors that continue to impact the Michigan market.
For the nine-month period, net sales decreased marginally from $16,853 in 2008 to $16,570 in 2009, and the operating loss was reduced from $4,306 in 2008 to $1,450 in 2009. The $2,856 improvement in operating results was due to improved manufacturing efficiencies and other cost-reduction initiatives, as well as lower marketing expenditures and lower personnel costs.
The company also announced that Frank Buck has joined Brampton Brick as senior vice president of Strategic Development for the Masonry Products business segment. His responsibilities include the development and implementation of sales and marketing strategies for both the Canadian and U.S. markets. Buck has over 30 years of experience in the building products industry, including nine years in the brick industry in Canada and the U.S. This background will provide valuable experience as the company continues to develop its strategies to expand its markets and achieve growth in both its traditional clay brick products and the many new concrete masonry products.
The company’s Masonry Products and Landscape Products business segments are cyclical. Demand for masonry products fluctuates in accordance with the level of new residential and commercial construction activity, while demand for landscape products fluctuates in accordance with the level of industrial, commercial and institutional construction activity and consumer spending. These business segments are also seasonal. Historically, sales are greatest in the second and third quarters of each year and are less in the first and fourth quarters. The Landscape Products business segment is affected to a greater extent than the Masonry Products business segment.
To date, economic conditions have continued to have a significant impact on residential and commercial construction activity and on consumer spending. Demand for the company’s products has been affected accordingly. In recent months, there has been a notable increase in new home sales, compared to the latter part of 2008 and the early part of 2009, in the company’s primary market of Southern Ontario. While this upturn may be expected to have some impact on new home construction in the fourth quarter of 2009, the company believes that the majority of the impact will occur in 2010. Consequently, the company continues to monitor sales forecasts and cash flows and adjust operating plans, production levels, manpower requirements and discretionary expenditures, as required, in order to minimize the financial impact of the slowdown on operating results and cash flows.
Construction of the Indiana clay brick manufacturing plant is now completed. Testing and commissioning of the production equipment was carried out throughout much of the first quarter, and commercial production began in April.
Additional details are available at www.bramptonbrick.com.